Gold Prices May See 8% Correction Before USD 5,500 Rally

Gold prices may see a correction of up to 8% in the near term before resuming their rally towards USD 5,500 over the next 12-15 months. This prediction comes from Motilal Oswal Financial Services Ltd.'s (MOFSL) H1 2026 Precious Metals Outlook.

The report highlights a shift in factors driving gold prices, noting that geopolitical conflicts no longer automatically translate into gains for the precious metal. MOFSL has recommended a staggered accumulation strategy for long-term investors, saying 'gold could witness a correction of 6-8% from current levels before targeting USD 4,800 (Rs 4,56,564.24), followed by USD 5,500+ (Rs 5,23,146.53) over a 12-15 month horizon.'

On the domestic front, assuming a USD/INR exchange rate of 95.5, MOFSL identifies accumulation levels between Rs 1,33,000-Rs 1,30,000, with medium-term targets of Rs 1,68,000 followed by Rs 1,93,000.

The report also mentions that gold's long-term investment case remains intact, but the coming year calls for patience over impulse. Until real interest rates begin to fall meaningfully, gold could remain range-bound or face a further 6-8% correction in the near term. Investors may consider staggered accumulation, buying in tranches on declines rather than attempting to time the market bottom.